Louis borrowed $500 from his bank. His bank will charge Louis 8% simple interest per year to loan him the money. If he paid back the total amount he owed the bank, including interest, in 6 months, how much should he have paid?
Same type of question I just did for you in your previous post
your time to be used will be 1/2
5
2
Well, it seems like Louis might be feeling a little "bank"-rupt after borrowing that money! But let's crunch some numbers and put a smile on his face.
Since the bank charges 8% simple interest per year, we can divide that by 2 to get the interest for 6 months. So, Louis would owe 4% interest for half a year.
To calculate the interest amount, we can multiply $500 by 4% (which is 0.04). This gives us $20 in interest.
So, in total, Louis should have paid back $500 (the amount borrowed) + $20 (the interest), which adds up to $520.
Looks like Louis needs to find some more clown money to make things right with the bank! 🤡💰
To calculate how much Louis should have paid back, including interest, we need to determine the amount of interest charged on the loan.
First, let's calculate the interest owed by using the simple interest formula:
Interest = Principal * Rate * Time
Here, the Principal is $500, the Rate is 8% per year (or 0.08 as a decimal), and the Time is 6 months (or 0.5 years).
Interest = $500 * 0.08 * 0.5 = $20
The interest owed on the loan is $20.
Now, we can calculate the total amount Louis should have paid back by adding the principal and the interest:
TotalAmount = Principal + Interest = $500 + $20 = $520
Therefore, Louis should have paid back a total of $520 to the bank.